TV Advertising is Alive, Well, and Evolving Fast

At RampUp in New York, we sat down with Fred Bucher, CMO of Spectrum Reach, to talk about the past, present, and future of TV advertising. Listen to the audio file here or read the interview below:

RampUp:I liked what you wrote on your blog recently about the “death of TV” and the response to the article in the New York Times about WPP downgrading their expectations. Can you talk a little bit more about the so-called death of TV and what this decline means for TV advertising? To what can we attribute these sentiments?Fred: Well, the world has changed a lot, and so for those of us who’ve been in the business, the way people watch TV and the way advertisers and consumers interact with it has certainly changed. There’s more competition for those advertising dollars, and I think that has driven a lot of the misinformation. You have very large ad-tech companies in Google and Facebook who have built incredible businesses, but have an agenda clearly that they would like to eat into the $70+ billion a year spent on TV advertising. A great way for them to do that is to say hey, just like newspapers, just like other forms of media that have been disintermediated by the advent of digital, television is going that way. Nobody watches. Millennials don’t watch it. People don’t pay attention to the commercials. You hear all that, and there’s a big disconnect between that line of thought and the actual facts. Most people still spend 5+ hours a day watching television. Millennials spend 3+ hours a day watching television, but they spend more time watching television than they spend on Facebook or YouTube. If you start to think about all the other ways that people consume television content—Netflix, Hulu, HBO—you’re starting to see that television is alive, and there’s more content produced today than ever. Eighty-five percent of non-sports television is still viewed live, so there’s this perception that because we have all this technology, nobody sits down and watches anymore. That’s just not the case. Look, we don’t have our heads in the sand. We watch television on more screens, but our position is that it has created more opportunities for advertisers to reach more people.

I think what is changing is that there’s more advertising-free television options today than there were before. As a result, that proposition between the advertising community and consumers has changed, and that’s where we need to evolve. You’re seeing that now in terms of TV advertising formats, surrounding television with more data and insights where I think the Facebooks and the Googles of the world have been able to provide a lot more data and insights. That’s where we’re going. What we’re trying to do is move forward as an industry with a clear-eyed view of what’s actually happening. We try to cut through and say this notion that television is “dying” is really competitive positioning of people having an agenda. As an advertiser, your best vehicle for reaching large amounts of people and building your brand is still television. This is why Google and YouTube sponsored the World Series. RampUp: You mentioned a lot just then about data and insights and cutting through. Certainly, we’re seeing a lot of those words occurring with Google, Facebook, YouTube, and all these digital channels as well in terms of measurement. How is that evolving in the advanced TV space?Fred: This is an area where we are playing catch up, but catching up quickly. One of the most exciting things is the level of investment, particularly around these advanced TV products. In a nutshell, what these investments aim to achieve is bringing the data and functionality of what has been traditional digital advertising in terms of display and video into television.

So, when an advertiser says, “I want to have better targeting,” they can on television. When they build their plans, they want to make sure that they can use the data that they have around consumer behavior and marry that with first-party television data, which is set top box, census-level data. And when they do this, they want to know that that they’re not invading anyone’s privacy and that there’s none of the creep factor that you get on some of these traditional digital mediums. As an industry, we are very protective of people’s data, so we can use it in an anonymous way so advertisers can find households and types of consumers that they’re looking for.

So, I think that’s where the industry is going. We’re developing tools that more and more advertisers can take advantage of—not just big agencies and big advertisers that could run customized campaigns by paying a premium. That’s the future. RampUp: We’re talking about the marketer and advertiser perspective at the moment, but it’s obviously always all about the customer experience. Commercials have always played this outsized role in consumers’ lives. We always look forward to the Super Bowl commercials. There’s that Google Maps ad that was made into an Oscar-winning movie.

How do you see video or TV advertising evolving in the next five to ten years?Fred:I think television is still very much the heart of our culture. Twenty percent of people still make travel decisions based on things they see on television. More than 80 percent of the social media activity that takes place during prime time is around television content. So, the water cooler may have moved from the corner in the kitchen or the office and into the phones that we all have in our hands, but I think television still has the power to move, inspire, and evoke passion like no other medium. So I don’t see that changing. What I do see changing is we clearly have some work to do around formatting. We still sell in 15- and 30-second increments. You still see large blocks of ads across both broadcast and cable, and you’re seeing lots of folks, including us, experiment with that. So, how can we create a great opportunity for advertisers to interact and be part of the content, but also make sure that we’re being sensitive to consumer needs? Again, I think that, as you noted, whether it being the Super Bowl or other major television events, people will react to the ads, so I think people still do enjoy them. I think it’s imperative upon marketers just to get better at telling the story of their brands. RampUp: You mentioned marketers need to tell their brand story in a very evocative, emotional way, and then also having the right information to make decisions. This, to me, speaks to the state of marketing today in terms of bringing the creatives and the quants to the table and saying, “This creative is going to resonate with people because the data says so.”

How do you see these groups coming together more and more? You’re the CMO of a television advertising company, so you must deal with this on a daily basis.Fred: The art and the science. Yes. We have an in-house group called Kernel, so we have over 200-plus people who create advertising content for us and for thousands of customers every day. So, we are big believers in creative messaging and being able to deliver that creative at scale and make it accessible. When I started in this business, I spent a half million dollars to end up with a 30-second spot. You’d run it on a bunch of different channels. Now, you need to think about ways to be able to scale creative much more efficiently and nimbly, and a lot of that’s driven by data. As television now has more real-time reporting, you’re able to look and see how your campaign is performing. Particularly as you start to do more refined targeting through addressability, you need to be able to have ready access to that data and then ready access to a creative team who can take the insights from that and create great messaging. I think there’s a balance there. You don’t necessarily want to overreact because you can get volumes of data, and data in and of itself is not what you’re looking for. What you need are insights based on that data. Then, you need access to creative capabilities that can put together messaging quickly and not break your budget, and that’s what we talk to marketers all the time. Television in and of itself is a digital medium today, and team structures are changing to suit the speed digital requires. This is where you’re going to see more acceleration in that. That happens today right now in visual ads. A lot of AI-driven analysis and the resulting creative happens right in display, social media, and other environments. I think in a pure video format like television, you’re going to have that human component be a part of it for the foreseeable future. So it’s going to be really important to have access to actionable insights and a nimble team that can work with them.RampUp: Right. So, the future of TV advertising is the kids seeing one ad the parents seeing another, and everyone just having that great personalized experience. Fred: Yes. I think it will be interesting to see how refined people want to get. The dream is showing State Farm renters’ insurance ads only to people who are renting apartments. I think we’re moving in that direction, but there is also a benefit from other folks seeing that messaging. Every marketer is going to work with their agency and with companies like ours to figure out the appropriate level of targeting. The magic is that they’re going to have access to it where today they don’t necessarily have that.So, the fun for me and for my team is getting to work with a lot of great companies, tackle different problems, and take what is still a very powerful medium and reinvent a lot of the advertising experience. It’s exciting. That’s why we come to work every day. We like working with customers to help them build their businesses and take advantage of these incredible opportunities.